Why US Business and Government Aren't Partners
THE recent trip to Japan by President George Bush illustrated once more the difficult relationship between corporate executives and government officials in the United States. For the president of the United States to take business leaders on a diplomatic mission was highly unusual; for the government and business to have different views of the outcome was not.
The relatively close and cooperative relationship that appears to exist between the private and public sectors in other industrialized countries seems almost impossible to achieve in the US.
The cherished practices of the free market combine with a traditional mistrust of government to create a fundamental division within American society. To business, government means taxes and regulations. "Get government off our back," is a favorite political rallying cry. Confrontation is built into the system. Both Congress and the executive, regardless of the party in power, resist the concept of a national industrial policy in which Washington and the market sector would cooperate in the development a nd export of products.
When the relationship moves to the international arena, the two sectors have clearly different and sometimes competing objectives. Government officials pursue diplomatic goals, sensitive to implications for foreign and strategic policies. Their responsibility is to Congress and the electorate beyond. Corporate executives are motivated by profit; they are responsible solely to their boards of directors and stockholders.
Business leaders often complain that the US government does not do enough to assist them in overcoming trade barriers or in helping them to sell products abroad. They point to examples of direct official intervention on behalf of business on the part of major competing nations such as Japan, France, and Germany. Yet it is not only the ideological gap and the differences in objectives that inhibit this kind of cooperation between US embassies and private-sector representatives abroad.
Existing US legislation complicates the dialogue between the two groups on international as well as domestic policies. Antitrust legislation means that no company can approach conversations with others in the same business or with government without a battery of lawyers. The Federal Advisory Committee Act, to give another example, requires that meetings between officials and business advisory groups be made public, an impediment to candid exchanges. Those who come to government from the private sector ar e encouraged to avoid excessive contact with their former colleagues in business to escape conflict of interest problems.
Business mistrust of government extends to an unwillingness to share information on products, markets, and research lest such information fall into the hands of competitors. Such a barrier inhibits the kind of close consultation that might make it possible for the government to assist in the promotion of US firms abroad.
On rare occasions, such as the efforts by former Secretary of State George Shultz on behalf of AT&T in Indonesia, US officials have espoused the cause of a single company in approaches to other governments. Few US business leaders however, are enthusiastic about having ambassadors abroad follow the pattern of other major trading countries and promote the interests of a single, "chosen instrument" company.
A further complication in the relationship arises from the growing internationalization of US companies. With the creation of joint ventures involving foreign capital and often foreign nationals as the chief executives, the definition of an "American company" becomes complex. Does a US official, for example, promote or defend the interests of a firm traditionally known as American, but which has 60 percent of its stock owned by foreigners, no US citizens among its top management, and its products made an d marketed totally abroad?
Effective cooperation has been established in some limited circumstances. Business-sector committees have worked closely with official negotiators in multilateral trade talks. Business advisers to government have been helpful in resolving international energy crises, but such cooperation is relatively rare.
As the problems with Japan illustrate, the US is facing competition from nations in which the private and public sectors work closely together to promote the industrial development and export capacity of a nation. Perhaps the traditional impediments to such cooperation in the US cannot be erased. If that is the case, this gap between two of the primary elements of American society will remain a major obstacle to a healthy US role in the new global competitive environment.